Mercantile Bank (US:MBWM) Prnewswire·2026-01-20 10:05Core Insights - Mercantile Bank Corporation reported a net income of $22.8 million, or $1.40 per diluted share, for Q4 2025, an increase from $19.6 million, or $1.22 per diluted share, in Q4 2024. For the full year 2025, net income was $88.8 million, or $5.47 per diluted share, compared to $79.6 million, or $4.93 per diluted share, in 2024 [1][2]. Financial Performance - Net revenue for Q4 2025 was $62.1 million, up $3.6 million, or 6.0%, from $58.5 million in Q4 2024. Net interest income was $51.0 million, an increase of $2.6 million, or 5.5%, from $48.4 million in the prior year [3][8]. - Noninterest income for Q4 2025 totaled $11.1 million, up $0.9 million, or 8.7%, from $10.2 million in Q4 2024, driven by higher treasury management fees and bank-owned life insurance income [3][12]. Interest Margin and Yield - The net interest margin was 3.43% in Q4 2025, slightly up from 3.41% in Q4 2024. The yield on average earning assets was 5.52%, down from 5.80% in the prior year, primarily due to a reduced yield on loans [4][9]. - The yield on loans decreased to 6.12% in Q4 2025 from 6.38% in Q4 2024, attributed to lower interest rates on variable-rate commercial loans [4][9]. Acquisition Impact - The acquisition of Eastern Michigan Financial Corporation added $572 million in total assets and $475 million in deposits, enhancing Mercantile's presence in East and Southeast Michigan [5][21]. - The loan-to-deposit ratio improved from approximately 98% at the end of 2024 to 95% at the end of 2025, with a further decline to 91% when including the acquisition [5][22]. Asset Quality - Nonperforming assets were $7.9 million, or 0.1% of total assets, as of December 31, 2025, compared to $5.7 million, or less than 0.1%, at the end of 2024. The increase was mainly due to a weakening commercial construction loan [24][25]. - Loan charge-offs for the full year 2025 totaled $3.1 million, with net loan charge-offs of $1.9 million, or less than 0.1% of average total loans [25][26]. Capital Position - Shareholders' equity reached $725 million as of December 31, 2025, up $140 million from the previous year. Both Mercantile Bank and Eastern Michigan Bank maintained "well-capitalized" positions [27][28]. - The total risk-based capital ratios were 13.8% for Mercantile Bank and 15.3% for Eastern Michigan Bank, exceeding the 10% minimum regulatory threshold [27]. Future Outlook - The company plans to continue expanding its local deposit base to fund anticipated asset growth and maintain a focus on providing a wide array of financial solutions to clients [2][29]. - The Board of Directors declared an increased first quarter 2026 regular cash dividend, reflecting a commitment to building shareholder value [29][30].